QVC - Stakeholders - Ofcom

Ms Yvonne Matthews
Content and Standards, Floor 5
Ofcom
Riverside House
2A Southwark Bridge Road
London SE1 9HA
Dear Ms Matthews
29th January 2007
QVC Response to the OFCOM Pre-consultation Issues Paper
on Participation TV
Thank you for the opportunity to respond to the Issues Paper on Participation
TV.
1. INTRODUCTION
QVC UK is part of a worldwide business with annual gross revenues in
excess of $5 billion employing over 16,000 people. The business also
includes QVC USA, QVC Japan and QVC Germany. QVC UK is a home
shopping channel and electronic retailer operating via a broadcast service on
digital terrestrial, cable and satellite television platforms. QVC UK reaches
over 17 million UK homes and is the most widely distributed multi-channel TV
station. In 2006, QVC UK was the UK’s largest teleshopping channel by sales
revenue, over £360 million in 2006, and employs over 2,000 people in the UK
QVC is a member of various industry bodies, including the Electronic
Retailers Association (ERA Europe) and the Satellite & Cable Broadcasters'
Group (SCBG).
2. THE DEFINITION OF PARTICIPATION TV (QUESTION 1)
QVC are satisfied with the definition of Participation TV given in section one of
the paper.
We consider the Participation TV industry to be distinctly different from the
teleshopping industry. It is therefore important to define Participation TV as a
separate entity; if Participation TV services were deemed to be advertising, it
is important that regulations can be made applicable specifically to each
industry independently.
Teleshopping is defined in the TWF directive 1 as :
1
Section 1 of Television Without Frontiers Directive, 97/36/EC, soon to be superseded by the
Audio-Visual Media Services Directive.

“direct offers broadcast to the public with a view to the supply of goods or
services, including immovable property, rights and obligations, in return for
payment”
While we note that Participation TV could technically fit within this definition
we would point out that teleshopping could also technically fit within the
definition of television advertising given within the same directive; it is clear,
however, that due to the distinct differences between traditional television
advertising and teleshopping, there is a need to separate the two to ensure
that they are correctly regulated.
We consider the same is true of teleshopping and Participation TV. If the two
are not clearly defined at this stage, problems could arise in regulating them
effectively.
3. THE PROPOSED SCOPE OF THE FORMAL CONSULTATION
(QUESTION 2)
QVC are satisfied with OFCOM’s proposed scope of the consultation; namely
that it will cover television services that rely wholly or mainly on viewers
paying for an opportunity to participate in the service. We agree that the
means of participation be widened beyond premium rate telephony to
encompass new payment methods.
We also agree that, where it is clear that PRS contributes to the editorial
content of the programme, it should not be included in the scope of the 2007
consultation. We would suggest, however, that safeguards are introduced to
ensure this provision is not used as a loophole by Participation TV services to
circumnavigate the new regulatory system that results from the consultation.
4. POSSIBLE REGULATORY APPROACHES (QUESTION 4)
QVC considers that options A and B represent the only viable regulatory
approaches.
We consider that Option C would encourage Participation TV services to
amend their services to ensure they fell within either editorial or advertising,
depending on which regulations were more favourable. Furthermore, it would
add an extra burden to the regulator having to decide in which category a
Participation TV service fell in and extend the amount of time it takes for the
regulator to stop practices that are in breach of their code.
We do not understand how Option D could work in harmony with the
separation principle. Furthermore, as with Option C, we consider Option D
would cause an extra regulatory burden and would cause confusion as to
which regulator should be taking action; it could also lead to inconsistency in
decisions between regulators. It would also dilute the ASA’s “one stop shop”

concept, as the public would have to contact different regulators depending on
the nature of the offence.
We consider that the most important function of the 2007 consultation will be
to identify whether Participation TV should be considered as editorial or
advertising so that resulting regulations can be applied both efficiently and
effectively.
5. CHANGES TO THE CODES (Question 5)
QVC does not understand how, due to their quintessential commercial nature,
Participation TV services can be considered as editorial. We consider they
currently breach a number of rules in Section 10 of the Broadcast Code.
Clarification is needed as to why Participation TV services are not considered
in breach of various rules in Section 10, most notably rules 10.2, 10.3 and
10.4. Nevertheless, if Participation TV services were to be considered as
editorial, we consider a number of changes would be necessary to the
Broadcast Code.
Rule 2.2 of the Broadcast Code should be expanded to ensure that claims did
not have to result in harm or offence to be considered misleading.
Furthermore, we consider that while Rule 2.11 could encompass a number of
potential offences of disingenuous Participation TV services, a guidance note
should be issued to clarify practices that are either likely or certain to breach
the rule. We also consider that new rules may need to be added to regulate
specific types of Participation TV services.
We do not consider that, in relation to Participation TV services, the BCAP
Code needs to be amended. Unlike the Broadcast Code, the BCAP Code was
designed to regulate content that was primarily of a commercial nature. We
note that a number of Participation TV services would be prohibited under the
BCAP Code if they were considered advertising. We consider, however, that
the BCAP Code prohibits these types of advertisements for good reason and
that it would be paradoxical for the BCAP Code to be altered just to ensure
the survival of these services. We consider that other elements of
Participation TV that are currently the cause of public concern could be dealt
with under the current provisions for misleading advertising.
Furthermore, the process of reviewing and amending the BCAP Code is
currently being undertaken by BCAP and we consider that any necessary
amendments will be identified in that review. We believe that to be the correct
forum for BCAP Code changes.
We consider it is possible that because Participation TV is in its infancy there
may be regulatory issues that will not be identified by the 2007 consultation
which become apparent in the future. We think it is important therefore that,
regardless of whether it is defined as advertising or editorial, these services
are clearly defined as a distinct form of editorial/advertising so that rules can

e added to the Broadcast Code/BCAP Code which are specifically applicable
to Participation TV services.
We would also recommend that OFCOM/ASA consult ICSTIS to ensure they
have a common approach when regulating Participation TV services.
Yours sincerely
Danny Bugler
Advertising Standards Compliance Officer
danny_bugler@qvc.com